Western Europe Data Center Construction Market Outlook 2023-2028: Rising Colocation Data Center Investments, Increase in Sustainable Initiatives, Growing Adoption of Artificial Intelligence
DUBLIN, May 26, 2023 /PRNewswire/ -- The "Western Europe Data Center Construction Market - Industry Outlook & Forecast 2023-2028" report has been added to ResearchAndMarkets.com's offering.
The Western Europe data center construction market is expected to reach a value of $10.61 billion by 2028 from $8.22 billion in 2022, growing at a CAGR of 4.33% during 2022 to 2028
There is a high demand from organizations for retail colocation services in developing countries. Enterprises having limited budgets and demanding geographical distribution capacities will drive the demand for retail colocation services. There is an increasing demand for computing power from cloud providers, enterprises, IoT, and Big Data organizations, which will drive wholesale colocation demand.
Germany leads the Western Europe data center market with an overall investment of over USD 1.8 billion in 2022. The country's cumulative growth is expected to be more than USD 12 billion during the forecast period. The growth in data center development has led the contractors to implement new sustainable methods, increasing the competition among them. Operators opt for these contractors to enhance their green credentials.
There is significant growth in greenfield and modular data center developments. The modular data center developments are increased as the construction methods are seemed inefficient due to labor shortages, budget constraints, and construction delays in certain countries across the region. The increased demand for modular solutions from data center operators is increasing the revenue of modular data center solutions providers such as Vertiv, Dell, and HPE, among others.
The power capacity is expected to grow significantly in the region with the advent of colocation and hyperscale operators investing highly in the market. There is a trend of procuring energy harnessed from renewable power sources by colocation, hyperscale, and colocation service providers.
KEY TRENDS & DRIVERS
Growing Adoption of Artificial Intelligence
Several AI initiatives in countries across the region include global partnerships on artificial intelligence, a mission on artificial intelligence, a national strategy on artificial intelligence, and others. For instance, The Government of France invested around USD 1.7 billion in its National Strategy for Artificial Intelligence.
The high adoption of AI/ML solutions is prompting the installation of a highly efficient cooling infrastructure. Liquid cooling is the prominent technology for supporting AI/ML workloads in High-Performance Computing (HPC). Direct-to-chip and liquid-immersion cooling markets, through OEM, are making strong bonds.
Research & Development centers are being set up for innovations in AI and other applications across various Western European countries. For instance, R&D centers for AI have been set up by companies such as Google, Oracle, and Huawei.
Data centers, the major sources of carbon emissions worldwide, are looking for sustainable initiatives to reduce the high quantity of CO2 emissions generated by the facilities. According to the Europe Climate act, a part of the European Green Deal, countries across the continent are aiming to achieve net zero carbon emissions by the year 2050.
Various operators in Western Europe are a part of the Climate Neutral Data Center Pact act, such as Interxion (Digital Realty), Aruba, OVHcloud, Equinix, and Scaleway data center, among 17 industry associations. The pact states that the facilities part of it must be powered completely using energy harnessed from renewable energy sources such as wind, hydro, solar, and others by 2030. The Government of the UK aims to achieve 100% renewable energy in its energy mix by 2035.
Rising Colocation Data Center Investments
The Western Europe data center construction market has shown signs ofgrowth with the development of hyperscale data centers by cloud service providers such as Microsoft, IBM, Amazon Web Services (AWS), Oracle, Google, and Tencent. The prominent investors in the Western Europe data center construction include Equinix, Interxion (Digital Realty), NTT Global Centers, Echelon Data Centres, Iron Mountain, OVHcloud, Vantage Data Centers, and VIRTUS Data Centres.
In August 2022, Proximity Data Centres opened a data center in Buckinghamshire. A loan of USD 30.8 million was granted to the operator for its UK expansion, with a total investment of USD 99 million. OVHcloud, a cloud computing, has planned to invest around USD 101 million by 2027 for its upcoming data center in Limburg.
Telehouse has planned an investment of around USD 988 million for its European expansion. Telehouse plans an investment of around USD 988 million for its expansion in countries across Western Europe and other regions in Europe. An increase in data center investment will provide huge revenue opportunities for construction contractors and colocation and infrastructure providers worth billions of dollars.
Support of The Government For Data Centers
Data Center Design Certifications
Market Opportunities & Trends
Market Growth Enablers
Prominent Support Infrastructure Providers
Prominent Construction Contractors
Prominent Data Center Investors
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